New refugee deal between Australia and Papua New Guinea features a shift in direction for AusAID's PNG programme.

Transcript

A specialist in Australia's aid programme in Papua New Guinea denies that the new refugee deal between the two countries constitutes Canberra handing over its aid control in PNG.

Following the announcement of the deal, PNG's government says it can more closely align the priorities of Australia's US$450 million aid programme in PNG with its own priorities.

The Australian National University's Stephen Howes told Johnny Blades that for some time PNG has been seeking for Australian aid to be more focused on capital or high-impact projects in PNG.

STEPHEN HOWES: They involve either building something new or rebuilding. The Australian aid has traditionally been used much more for maintaining existing services, so a good example is, in the area of roads, Australian aid has been used for maintenance, rather than for building new roads. So the PNG government would like Australian aid to be used more for capital projects. And we see with the recent announcements that is the direction in which it's now going. A fair few announcements made by Rudd, both on his trip to PNG and then in the Brisbane announcement, involve capital p rojects. A new highway from Lae to Ramu, the rebuilding of the Lae Hospital and the rebuilding of the Moresby courthouse.

JOHNNY BLADES: And O'Neill has indicated that he'd been trying to get it towards this kind of approach in discussions with Gillard before this.

SH: That's right. He had been pushing for it, and before him Somare had been pushing for it. And they had been making some progress, so I understand the announcement about the Lae Hospital was actually made by Julia Gillard in her visit in February. And that's not surprising because PNG has been co-operating, in relation to Manus, with Australia, for some time.

JB: So they have leveraged a more high-impact programme of the AusAID overall package now?

SH: That's right. So we don't know the value of these projects and we don't know to what extent they're going to actually add to the total extent of aid given to PNG, or whether some of them will substitute for existing programmes. It's important to remember it's a very large aid programme - it's half a billion dollars a year. And these capital projects are multi-year projects. They take years to get off the ground, and we're only now in the feasibility stage, so I don't think you'd actually see any work on them for a couple of years, and then the work will be spread out over several years. So what's been announced so far I would not say was a major overhaul of the aid programme. I'd say it was something of a shift in direction.

JB: The Australian opposition leader has been very critical about this, and O'Neill really bristled at that. Is Abbott inferring that to hand more control over to PNG is dangerous because there's some sort of transparency issue over that all?

SH: Well, I think the opposition leader just wasn't accurate as to what the change is, and, in fact, completely missed it by making the suggestion the Australian government was going to hand over the aid itself - just write a cheque to the PNG government. And, as I said, there's no suggestion of that, and I'm not surprised the PNG government was annoyed that the agreement was misinterpreted.